NOTE 10 – COMMITMENTS AND CONTINGENCIES

Predecessor:

The Predecessor’s research is conducted at the Hebrew University (subject to license and research agreements) in Professor Bernholtz Yehezkel’s laboratory, and the drug development activity is conducted through subcontractors.

The Predecessor has signed an option agreement for an exclusive license for the technology with “Yissum Research Development Company of the Hebrew University of Jerusalem Ltd.” (“Yissum”), the commercialization Company of the Hebrew University of Jerusalem.

In November 2022, the Predecessor exercised its option and signed a license agreement with Yissum.

Under the agreement, the Predecessor undertook to finance research at Professor Bernholtz Yehezkel’s laboratory, promote the development of the products that result from the research, and maintain the patents that result from the research.

The Predecessor currently has three projects under four different agreements with Yissum:

LV-100 – Liposomal Nano-Mupirocin: A new antibiotic treatment aimed at combating resistant bacteria which is in pre-clinical studies phase. The Predecessor is obligated to pay royalties at the rate of 3% of net sales. The Predecessor shall pay Yissum the following amounts in connection with the achievement of the following milestones per each Product (each, a “Milestone”): (1) $150 upon first patient enrolled in a Phase I Clinical Trial; (2) $300 upon first patient enrolled in a Phase II Clinical Trial; (3) $450 upon First patient enrolled in a Phase III Clinical Trial and (4) $600 upon first commercial sale in either Europe or the US, the earlier to occur of the two.

LV-200 – Liposomal Candesartan (also called ARB): A supportive treatment designed to improve existing cancer therapies by enhancing drug efficacy and reducing toxicity and side effects which is in pre-clinical studies. In 2023, the Company entered into an option agreement with Yissum relating to a preclinical ARB formulation program. Under this agreement, the Company is entitled to receive a final scientific report following completion of four designated preclinical studies, after which a 90-day option exercise period and 120 days to negotiate an exclusive license. However, in November 2025, Yissum informed the Company that, in its view, the option exercise period had already commenced and expired, based on a report Yissum considers to be the final scientific report, which Yissum claims was delivered in September 2024. The Company disagrees with this position, noting that (i) the report delivered in 2024 did not include the components specified in the agreement, and (ii) research activities continued thereafter with the knowledge and involvement of Yissum and University personnel. The parties are currently engaged in discussions to resolve this disagreement, but there can be no assurance that the Company will be successful in amicably resolving this issue. See also Note 3 regarding the impairment of the intangible asset associated with the ARB program.

LV-400 – A Liposomal Platform for Vaccine Development: This platform is intended for the development of new vaccines, such as those for COVID-19, Zika, and West Nile virus.

The Predecessor is obligated to pay royalties at the rate of 3% of net sales. The Predecessor shall pay Yissum the following amounts in connection with the achievement of the following milestones per each Product (each, a “Milestone”): (1) $150 upon first patient enrolled in a Phase I Clinical Trial; (2) $300 upon first patient enrolled in a Phase II Clinical Trial; (3) $450 upon First patient enrolled in a Phase III Clinical Trial and (4) $600 upon first commercial sale in either Europe or the US, the earlier to occur of the two.

In May 2025, the Company entered into a Master Services Agreement (“MSA”) with STA Pharmaceutical Hong Kong Limited (“STA”), an affiliate of WuXi AppTec, for development, manufacturing and analytical services related to the Company’s L-100 Liposomal Nano-Mupirocin program for preclinical studies and future clinical trials. The services are performed on a project-by-project basis and are structured around defined milestones, including: (i) technology transfer and process development at laboratory scale, (ii) scale-up and non-GMP engineering batches, (iii) GMP manufacturing of clinical trial material (CTM), (iv) analytical method development and validation, (v) release testing and regulatory support, and (vi) stability studies (including long-term stability programs). The scope of work may be modified through change orders to reflect additional testing, stability requirements and procurement of materials. The Company may terminate the MSA for convenience in accordance with its terms. Total cost of the agreement (including amendments) is $1,330. As of December 31, 2025, STA Pharmaceuticals provided services to the Company at the amount of $800.